2010 SUMMARY ANNUAL REPORT

Delivering Value

Certain disclosures in this Summary Annual Report may be considered “forward-looking” statements. These are made pursuant to “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The “Cautionary Statement” in Management’s Discussion and Analysis in Appendix B of ConocoPhillips’ 2011 Proxy Statement should be read in conjunction with such statements.

“ConocoPhillips,” “the company,” “we,” “us” and “our” are used interchangeably in this report to refer to the businesses of ConocoPhillips and its consolidated subsidiaries.

Definition of resources: ConocoPhillips uses the term “resources” in this document. The company estimates its total resources based on a system developed by the Society of Petroleum Engineers that classifies recoverable hydrocarbons into six categories based on their status at the time of reporting. Three (proved, probable and possible reserves) are deemed commercial, and three others are deemed noncommercial or contingent. The company’s resource estimate encompasses volumes associated with all six categories.

DEBT-TO-CAPITAL RATIO(Percent)

TOTAL RECORDABLE RATE(Safety incidents per 200,000 hours)

RETURN ON CAPITAL EMPLOYED*(Percent)

33

31

25

20082009

2010

18

7

10

20082009

2010

0.52

0.40

0.31

20082009

2010

*See reconciliation on page 38.

“ We have demonstrated our ability to successfully adapt our traditional, proven business strategies to new realities.”

James J. Mulva Chairman and Chief Executive Officer

1

Letter to Shareholders

Since the fall of 2009, we have pursued a multi-year plan to take decisive actions that deliver increased value for our owners. These include building upon our strong operational, safety and environmental

performance, increasing distributions to shareholders,

adjusting our portfolio, and renewing our commitment to

strategic, financial and operational discipline.

We made significant progress in 2010, highlighted by

a 10 percent increase in our quarterly dividend rate,

realization of $15.4 billion in proceeds from selective

asset divestments that included most of our LUKOIL

holdings, an 18 percent decrease in debt to $23.6 billion,

and an increase in our year-end cash and short-term

investments balance to $10.4 billion. We also met our key

operational targets, while recording our safest year since

the inception of ConocoPhillips in 2002 and increasing

annual earnings to $11.4 billion.

This performance delivered significant value to our

shareholders, as ConocoPhillips’ total shareholder return

for the year of 39 percent was highest among our industry

peer group. We have continued our commitment to increase

shareholder distributions in 2011, announcing a 20 percent

increase in the quarterly dividend rate and an additional

$10 billion share repurchase program.

These achievements occurred in a market still gradually

recovering from the recent global economic downturn.

Liquids price realizations increased during 2010, but North

American natural gas prices remained impacted by weak

demand and rising supply, while surplus global refining

capacity allowed only a partial recovery in refining margins.

Through our investments, we are continuing to increase our

emphasis on exploration and production, to which 86 percent

of our capital program was dedicated during 2010, with

89 percent planned for 2011.

John A. CarrigPresident*

James J. MulvaChairman and Chief Executive Officer

2

DELIVERING ON OUR COMMITMENTS

Progress is well under way on our decisive multi-year actions

intended to enable ConocoPhillips to deliver long-term

value and compete effectively throughout all market cycles.

Specifically:

• Sell $10 billion in non-core assets over two years –

We completed $7.1 billion in asset sales during 2010,

including divestiture of our 9 percent interest in Syncrude for

$4.6 billion, and sales of smaller ventures and lower-returning

assets. The sales will not materially impact future reserves

and production growth. We anticipate at least $3 billion in

additional sales during 2011.

• Sell our LUKOIL stock – We expanded our initial plan

and determined to divest all of our 20 percent ownership

in LUKOIL stock, then utilize the proceeds to fund our own

development opportunities and repurchase our stock. We

completed the sale of our LUKOIL investment by early 2011,

yielding $9.5 billion in total proceeds, including $8.3 billion

realized during 2010.

• Reduce debt and improve financial flexibility –

We retired $5.1 billion in debt during the year, lowering

remaining debt to $23.6 billion and the debt-to-capital ratio

to 25 percent, which is within our target range. We ended

2010 with $10.4 billion in cash and short-term investments,

most of which we will use for share repurchases, with small,

selective asset acquisitions also possible.

• Increase shareholder distributions – Our efforts

to deliver value to shareholders during 2010 included a

10 percent increase in our quarterly dividend rate. This was

the eighth consecutive annual increase since the company’s

inception in 2002, yielding a compounded annual dividend

growth rate of 13.5 percent over this period. In addition to

paying $3.2 billion in dividends, we repurchased 65 million

shares of our stock for $3.9 billion, consistent with plans to

increase key metrics on a per-share basis.

• Improve capital efficiency – Achievement of these

initiatives, combined with higher margins and a disciplined

capital investment program, improved our return on capital

employed to 10 percent during 2010. Spending for our capital

program declined 11 percent to $10.7 billion, which was

primarily allocated to our Exploration and Production (E&P)

business. In response to the improved energy market, we

plan a $13.5 billion capital program for 2011.

OPERATIONAL ACHIEVEMENTS

E&P recorded several key accomplishments that will facilitate

future value accretion and growth. Among them were record

safety performance, oil and gas production volumes that

met operating targets, and replacement of 138 percent of

production with proved reserve additions on an organic basis

at competitive finding and development costs.

To expand our opportunities in North America, we added

acreage in liquids-rich unconventional shale drilling

trends. In the Canadian oil sands, volumes increased as

work continued on several large expansion projects. We

broadened our presence in the growing global liquefied

natural gas (LNG) market through startup of the Qatargas 3

project in 2010. In addition, ongoing development of the

major Australia Pacific LNG (APLNG) venture continues. In

February 2011, APLNG entered into a non-binding heads

of agreement to supply up to 4.3 million tonnes annually of

LNG for 20 years to Sinopec, a major customer in China, and

for Sinopec to subscribe for a 15 percent equity interest in

the APLNG venture.

Looking forward, we expect to organically replace

reserves and grow long-term production by developing

existing opportunities available in our asset portfolio and

increasing emphasis on exploration. Our 2011 plans include

continued development of major projects, exploitation of

unconventional shale resources in the United States, Canada

and elsewhere, and wildcat drilling and appraisal of earlier

discoveries from our exploration portfolio.

“ We expect to organically replace reserves and grow long-term production by developing existing opportunities available in our asset portfolio and increasing emphasis on exploration.”

3

Our Refining and Marketing business also recorded its

safest year ever, with favorable capacity utilization that met

targets despite a difficult global operating environment.

We expect continued progress on the Wood River Refinery’s

coker and refinery expansion project, enabling increased

bitumen processing capacity in late 2011, thus accom-

modating E&P’s rising Canadian oil sands production.

Consistent with plans to reduce our exposure to refining

margins, we decided not to proceed with proposed Yanbu

and Wilhelmshaven refinery investments.

Our chemicals and midstream joint ventures entered their

second decade with strong financial results in growing markets.

OUR COMMUNITIES AND PEOPLE

We were saddened by the tragic oil spill in the deepwater

Gulf of Mexico this past summer, and assisted in response

efforts. We firmly believe deepwater drilling can be done

safely and in an environmentally sensitive manner. In order

to enhance the industry’s ability to meet the highest

standards, we joined with three other major energy

companies to form the Marine Well Containment Company,

which is designing and building equipment to supplement

emergency response capabilities.

Additionally, we are urging the U.S. government to ensure

regulation of our industry is reasonable and cost-effective.

We also continue calling for enactment of a comprehensive

national energy policy to enhance supply availability, provide

a mandatory legislative framework to address greenhouse

gas emissions, and encourage greater energy efficiency and

environmental care.

FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURNS(Dollars; Comparison assumes $100 was invested on Dec. 31, 2005)

QUARTERLY DIVIDENDS*(Cents per share)

$50Initial 2006 2007 2008 2009 2010

$100

$150

$200

ConocoPhillips

S&P 500 Index

Peer Group Index*

*Fourth quarter except 2011, which is first quarter.*BP, Chevron, ExxonMobil, Royal Dutch Shell and Total.

As part of our corporate culture, we strive to improve the

well-being of the communities in which we operate by making

charitable contributions to organizations that provide vital

community services. During 2010 we also broadened our

matching gift program, inspiring increased contributions and

greater volunteerism by ConocoPhillips employees and retirees.

To help ensure ongoing progress, we have implemented

programs to enhance the professional skills of our

employees, including executive leadership development and

succession planning overseen by our board of directors.

As we look ahead to 2011 and the years beyond, we believe

ConocoPhillips is better prepared to compete and prosper

during market upturns, as well as times of uncertainty. We are

excited about the emerging opportunities we see.

We have demonstrated our ability to successfully adapt our

traditional, proven business strategies to new realities, and to

harness the creativity and commitment of our employees. We

deeply appreciate their ongoing contributions, as well as the

trust shareholders exhibited in ConocoPhillips during 2010.

James J. MulvaChairman and Chief Executive Officer

John A. CarrigPresident*

*Retired as of March 1, 2011.

47

50

55

66

20082009

20102011

4

Financial and Operating Highlights

Millions of Dollars Except as Indicated

2010 2009* % Change

Financial

Total revenues and other income $ 198,655 152,390 30%

Net income attributable to ConocoPhillips (Earnings) $ 11,358 4,414 157

Earnings per share of common stock – diluted (dollars) $ 7.62 2.94 159

Net cash provided by operating activities $ 17,045 12,479 37

Capital expenditures and investments $ 9,761 10,861 (10)

Repurchase of company common stock $ 3,866 — —

Dividends paid on company common stock $ 3,175 2,832 12

Total assets $ 156,314 152,138 3

Total debt $ 23,592 28,653 (18)

Total equity $ 69,109 62,613 10

Total debt to capital (percent) 25% 31 (19)

Common stockholders’ equity $ 68,562 62,023 11

Common stockholders’ equity per share – book value (dollars) $ 47.92 41.73 15

Cash dividends per common share (dollars) $ 2.15 1.91 13

Closing stock price per common share (dollars) $ 68.10 51.07 33

Common shares outstanding at year end (in thousands) 1,430,765 1,486,256 (4)

Average common shares outstanding (in thousands)

Basic 1,479,330 1,487,650 (1)

Diluted 1,491,067 1,497,608 —

Employees at year end (in thousands) 29.7 30.0 (1)

2010 2009* % Change

Operating

E&P

U.S. crude oil and natural gas liquids production (MBD) 390 418 (7)%

Worldwide crude oil and natural gas liquids production (MBD) 913 968 (6)

U.S. natural gas production (MMCFD) 1,777 2,021 (12)

Worldwide natural gas production (MMCFD) 4,606 4,877 (6)

Worldwide bitumen production (MBD) 59 50 18

Worldwide synthetic oil production (MBD) 12 23 (48)

Worldwide production (MBOED) 1,752 1,854 (6)

LUKOIL Investment net production (MBOED) 326 437 (25)

Midstream natural gas liquids extracted (MBD) 193 187 3

Refinery crude oil processed (MBD) 2,156 2,226 (3)

Refinery capacity utilization rate (percent) 81% 84 (4)

U.S. gasoline sales (MBD) 1,120 1,130 (1)

U.S. distillates sales (MBD) 873 858 2

Worldwide petroleum product sales (MBD) 3,040 2,974 2

*Certain amounts for 2009 have been recast to reflect the change of recording the company’s equity earnings for LUKOIL on a one-quarter-lag basis.Use of Non-GAAP Financial Information – This Summary Annual Report includes the terms ”adjusted earnings” and ”ROCE.” These are Non-GAAP financial measures and are included to help facilitate comparisons of company operating performance across periods. A reconciliation of adjusted earnings and ROCE to earnings and ROCE determined in accordance with U.S. generally accepted accounting principles (GAAP) is shown on page 38.

5

www.conocophillips.com

ConocoPhillips is an international, integrated

energy company with interests around the world.

Headquartered in Houston, the company had

operations in more than 30 countries, approximately

29,700 employees, $156 billion of assets and

$189 billion of revenues as of Dec. 31, 2010.

CSH 11-0924 ENG